Before You Go

Inflation Rate Formula Gdp

Sales Formula

Retail Margin Formula

Click Through Rate Formula

Total Stockholders Equity Formula

Return Formula

Total Interest Formula

Demand Curve Formula

Economic profit is not recorded on a company’s financial statements nor is it required to be disclosed to regulators, investors or financial institutions. Meanwhile, accounting profit is a widely used performance measurement to indicate the overall financial success of an organization. Accounting profit measures the actual cash outlays and inflows, while economic profits incorporate a "what if" analysis. For this reason, an entity may report an accounting profit but realize an economic loss because resources could have been utilized better.

DCF analysis is a key valuation tool at analysts' disposal. Analysts use DCF to determine a company's current value according to its estimated future cash flows. For investors keen on gaining insights on what drives share value, few tools can rival DCF analysis.